Struggling Chinese real estate developer China Evergrande has announced that its chief executive and chief financial officer have resigned after initial findings in a probe found US$2 billion belonging to its property unit subsidiary was redirected back to the group.
The news comes as the company is already saddled with US$310 billion in debt.
China Evergrande said CEO Xia Haijun and CFO Pan Darong had resigned over their involvement in an arrangement to use the money as collateral to guarantee a series of loans. The money was then redirected to Evergrande through a third party, the company said. The loans involved three sets of deposits. The company didn't name the third party.
The company is discussing with the subsidiary Evergrande Property Services regarding the repayment plan of the sums related to the pledges. The plan is mainly to set off the relevant sums by transferring assets of the group to Evergrande Property Services.